2021 Annual report

AEROSTAR / Annual Report -2021

AEROSTAR / Annual Report -2021

004-0234 575070

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AEROSTAR / Annual Report -2021

AEROSTAR / Annual Report -2021

AEROSTAR / Annual Report 2021

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AEROSTAR / Annual Report 2021

Asia, Africa, Canada, USA

[aerostar@aerostar.ro]

[www.aerostar.ro]

Percentage of total sales

SALES IN 2021 – Dashboard

Defence systems

Manufacture of aeronautical products

Share of products and services

MRO civil aviation

Other products and services

AEROSTAR / Annual Report 2021

RomaniaEuropaAsia

An 2021 35.49%46.86% 11.80%

AfricaCanada+SUA

An 202032.05%50.93%11.44%

fabricatieMRO aviatia civilasisteme pentrualte produse si

produse de aparare servicii

aviatie(aero,terestre,nav

An 202137.6%29.0%29.6%3.8%

An 202043.0%24.2%28.7%4.1%

AEROSTAR / Annual Report 2021

AEROSTAR / Annual Report 2021

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AEROSTAR / Annual Report 2021

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AEROSTAR / Annual Report 2021

AEROSTAR / Annual Report 2021

AEROSTAR / Annual Report 2021

AEROSTAR / Annual Report 2021

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AEROSTAR / Annual Report 2021

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AEROSTAR / Annual Report 2021

376.434 294.839

AEROSTAR S.A. BACĂU

COMPANY INCOME STATEMENT

FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(unless specified otherwise, all amounts are stated in thousand lei)

Operating income

Income from sales

Income related to the inventories of finished goods and work in

Income from production of assets

Income from operating subsidies

Total operating income

Operating expenses

Material expenses

Expenses with employees’ benefits

Expenses regarding amortization of assets

Net income (expenses) from adjustments regarding current assets

5;6;20 (25.794)

Net income (expenses) from adjustments regarding provisions

Expenses regarding external services

Total operating expenses

Profit/loss from operating activity63.82338.349

Financial income

Financial expenses

Financial profit/loss

Profit before tax

Tax on current and deferred profit17;23(9.708)(3.616)

Net profit of the period

General Director

Financial Director

163.914 180.923

284.365 270.214

AEROSTAR S.A. BACĂU

COMPANY STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021 (direct method)

(unless specified otherwise, all amounts are stated in thousand lei)

CASH FLOWS FROM OPERATIONS

collected from customers

NET CASH FROM OPERATIONS

taxes and excises recovered from State Budget

subsidies receipts from State Budget payments

to suppliers and employees

payment of taxes, contributions and dues to State Budget

payment of profit tax to State Budget

CASH FLOWS FROM INVESTMENTS

interest collected from bank deposits set up

dividends received from subsidiaries

proceeds from financial assets

collected from sales of property, plant and equipment

payments for purchasing property, plant and equipment and

intangible assets

NET CASH FROM INVESTMENTS

NET CASH FROM FINANCING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

gross dividends paid

Net increase/decrease of cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

Effect of the exchange rate variation over the cash and cash

General Director

Financial Director

n 1 January 2021

31.12.2021 is 59.940

n 1 January 2020

31.12.2020 is 38.443

RC J04/1137/1991.

2021/27.08.2021. C

S.C. AEROSTAR S.A. BACAU

NOTES TO THE COMPANY FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(unless specified otherwise, all amounts are stated in thousand lei)

Property, plant and equipment are evaluated at their acquisition or production costs minus cumulative

depreciation and the impairment losses.

These items of property, plant and equipment are amortized by using the linear method.

Depreciation expenses are recognized in the profit and loss account.

The following useful lifetimes are assumed:

-technological equipment

-other property, plant and equipment

-investment property

The useful lifetimes are established by committees consisting of specialists from our company. The

useful lifetimes of the property, plant and equipment are stipulated by the fiscal legislation.

The company did not purchase assets from business combinations, nor did it classify assets for future

The investment property contains a number of 11 real estate – buildings and related lands that are

rented to third parties based on renting contracts.

The value of renting income in this category of fixed assets was 2.390 thousand lei.

On the date of transition to IFRS, the company estimated and included in the cost of the property,

plant and equipment the estimated costs for their decommissioning at the end of a useful lifetime.

These costs were reflected in the set-up of a provision, which is recorded in the profit and loss account

throughout the lifetime of the property, plant and equipment, byinclusion in the depreciation expense.

The depreciation of an asset begins when the asset is available for use (i.e. when the asset is in the

location and condition necessary to operate as envisioned by the top management) and ends on the day

when the asset is reclassified in another category or when it is derecognized.

The depreciation does not end when the asset is not in use.

The land and buildings are separable assets, and their accounts are kept separately, even when they

are acquired together.

The land has an unlimited useful lifetime and, therefore, is not submject to amortization.

In accordance with the provisions of IAS 36 “Impairment of assets”, the company proceeded to the

identification of any signs of impairment of the property, plant and equipment, taking into

consideration the external and internal sources of information.

Internal source of information:

The economic performance of the assets is good, all assets that are in operation benefit the company.

n 1 January 2021

20.734 3.271 5.411 22.874

17.521 3.320 3.459 17.660

1.1502215761.505

ss1327.0717.239300

s 39.269 19.969

s 235.202 182.691

2021 is 421.388

STAR SA is 48.728.784 l

s 44.646 27.815

AEROSTAR S.A. BACAU

NOTES TO THE COMPANY FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(unless specified otherwise, all amounts are stated in thousand lei)

NOTA 14 - SUBSIDIES

Subsidies related to assets

AEROSTAR registers the subsidies regarding assets in the category of deferred income.

Balance on 1 January, of which: Short term

Subsidies received:

Subsidies registered in income corresponding to the

calculated amortization

Balance on 31 December, of which:

In 2021 AEROSTAR S.A. did not receive subsidies for financing its assets.

The subsidies received in the previous years for financing its assts were related to the implementation

of 3 investment projects under 3 non-reimbursable financing agreements:

1.Contract no. 210304/22.04.2010: ‘Extension of the manufacturing and assembly capacities for

aerostructures for civil aviation’, performed between April 2010 and October 2012, the value

of the subsidy received from the Ministry of Economy, Trade and Business Environment

(MECMA) being 5.468 thousand lei;

2.Contract no. 229226/14.06.2012: ’Setting up a new manufacturing capacity for diversifying

production and export growth’, performed between June 2012 and May 2014, the value of the

subsidy received from the Ministry of Economy, Trade and Business Environment (MECMA)

being 6.011 thousand lei;

3.Contract no. 5IM/013/24.03.2015: ’Consolidation and sustainable development of the

machining and painting sectors by high performance investments’, carried out between March

and December 2015, the value of the subsidy received from the Ministry of European Funds

(MFE) being 8.299 thousand lei;

All investment projects in immobilized assets were implemented and finalized in accordance with the

contractual provisions assumed.

The balance of 4.192 thousand lei at the end of the year comprises of 17 thousand lei representing

surplus in inventory in the category of immobilizations and 4.175 thousand lei for subsidies related to

investments in immobilized assets which are to be recorded as income as the calculated

amortization is registered under costs, related to the contracts mentioned below:

1. contract no. 210304/22.04.2010:1.047 thousand lei

2. contract no. 229226/14.06.2012: 194 thousand lei 3.

contract no. 5IM/013/24.03.2015: 2.934 thousand lei

AEROSTAR S.A. BACAU

NOTES TO THE COMPANY FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(unless specified otherwise, all amounts are stated in thousand lei)

NOTE 16 - OTHER LIABILITIES

Other current liabilities, of which:

Liabilities related to manpower and similar accounts

Liabilities related to social security budget and state budget, of

- Social insurance

- Labour safety contribution -

Tax on salary type revenues

- Contribution for people with unemployed disabilities

- Other social liabilities

Other liabilities, of which:

- diverse creditors

Other long-term liabilities

In the category Other long-term liabilities are found:

- the liability regarding the right to use the land leased for the Maintenance Hangar of Iasi (1.525

The dividends in balance on 31 December 2021, in the amount of 2.300 thousand lei represent the

amounts remained in balance for the shareholders who did not show up at the offices of the paying

agent CEC Bank S.A. (the paying agent designated byAEROSTAR) and which were not time-barred.

AEROSTAR S.A. BACAU

NOTES TO THE COMPANY FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(unless specified otherwise, all amounts are stated in thousand lei)

The maximum exposure to credit risk on the reporting date is presented in the table below:

Sight and term deposits with banks

Trade receivables, net of adjustments for

Immobilized receivables

The maximum exposure to credit risk by geographical areas for trade receivables net of

depreciation adjustments is presented in the table below:

31.12.202131.12.2020

Domestic market20.596 13.279

Euro zone countries15.243 7.617

Great Britain12.373 5.840

Other European countries 1.574 1.242

Other regions 3.851 2.588

Total53.637 30.566

Gross valueGross value

Depreciation adjustments

The timeframe structure for the gross trade receivables on the reporting date is presented in the table

AdjustmentsAdjustments

for depreciation for depreciation

Past due, total of which:

Adjustments for depreciations resumed as revenues

Themovement in theadjustments forthedepreciation of tradereceivables duringthe year is presented

in the following table:

31.12.202131.12.2020

Balance on 1 January

Adjustments set up for depreciation

Balance on 31 December

On 31.12.2021, 97,58% of the balance of trade receivables are related to customers with a good

payment record.

AEROSTAR S.A. BACAU

NOTES TO THE COMPANY FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(unless specified otherwise, all amounts are stated in thousand lei)

b) Liquidity risk

The liquidity risk is the risk that AEROSTAR has difficulties in meeting the obligations associated

to the financial liabilities which are settled by cash payments.

AEROSTAR’s policy regarding this risk is to maintain an optimum level of liquidity so as to be able

to pay for the liabilities, as they become due.

To evaluate the liquidity risk, the treasury cash flows from operations, from investments and from

financing operations are monitored and reviewed weekly, monthly, quarterly and yearly in order to

determine the estimated level of net liquidity modifications.

Also, the specific liquidity indicators are reviewed monthly (general liquidity, immediate liquidity

and rate of general solvency) against the budgeted levels.

Moreover, in order to reduce the liquidity risk, AEROSTAR maintains annually a liquidity reserve as

a Credit Line (usable as an overdraft) granted by banks to a maximum limit of 2.500 thousand USD.

The time intervals used to review the contractual due dates of the financial liabilities, with a view to

highlighting the timeframe for the cash flows are shown in the table below:

Trade liabilities

Trade liabilities

The cash flows included in the analyses of the due dates are not expected to take place earlier or at

significantly different values.

On 31.12.2021 AEROSTAR has no records of overdue financial liabilities.

c) Foreign currency risk

The foreign currency risk is the risk that the fair value or future cash flows of a financial instrument

fluctuate because of the changes in the currency exchange rates.

Exposure to the foreign currency risk

AEROSTAR is exposed to the foreign currencyrisks, as 65% of the turnover recorded in the reporting

period is denominated in USD and EUR, while a significant part of the operating expenses is

denominated in LEI.

Therefore, Aerostar is exposed to the risk that the currency exchange rate variations will affect both

its net income and its financial position as expressed in lei.

The net exposure of the financial assets and liabilities to the foreign exchange risk is presented below

based on the carrying accounting values denominated in foreign currency recorded at the end of the

reporting period.

Cash and cash equivalents

Trade receivables

Net exposure in original currency

Trade liabilities

AEROSTAR S.A. BACAU

NOTES TO THE COMPANY FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(unless specified otherwise, all amounts are stated in thousand lei)

Sensitivity analysis

Taking into consideration the net exposure calculated in the above table, AEROSTAR can be deemed to

be exposed mainly to the foreign exchange risk generated by the variation of the foreign exchange rate

Taking into consideration the evolution of USD/LEU and EUR/LEU exchange rate in the previous

years, a relatively high volatility (+/- 10%) of the USD/LEU exchange rate and a moderate volatility

(+/-2%) of the EUR/LEU exchange rate can be noticed.

Thus, a reasonably possible variation of +/- 10% of the USD/LEU foreign exchange rate and +/-2%

of the EUR/LEU exchange rate and may be factored in at the end of the reporting period.

The effect of the reasonably possible variation of the exchange rates EUR/LEU and USD/LEU over

the financial result of AEROSTAR is calculated in the following table:

Possible reasonable variation of exchange rate

Net exposure, in the currency of origin

Currency exchange rate

Net exposure in functional currency

Effect of variation on the financial result

+/- 584 MII LEI

+/- 2.980 MII LEI

d) Interest rate risk

For the reporting period AEROSTAR has available a multi-product Credit Facility of 7.000 thousand

USD, intended for financing the Company’s operations, which includes:

1) Product A: in the amount of 2.500 thousand USD, usable as an overdraft, set up to provide at

any given time the necessary financial liquidity and flexibility (liquidity reserve);

2) Product B: in the amount of 7.000 thousand USD (provided that the aggregate amount used

from Product A and product B does not exceed the value of the multi-product Credit Facility),

usable as a facility of issuing bonds as instruments to ensure collaterals for the commercial

contractual obligations by issuing bank bond letters and import Letters of Credit.

The bank interest is applicable only for the overdraft for Product A in the amount of 2.500 thousand

As during the reporting period AEROSTAR did not use the Product A, the company revenues and

cash flows are independent from the interest rate variations on the banking market.

On 31.12.2021, the level of bonds granted by AEROSTAR under commercial agreements, by issue of

bank bond letters and import Letters of Credit amounts to 1.915 thousand USD (the equivalent of 8.371

On 31.12.2021 no mortgages are set up on the property assets in AEROSTAR’s ownership.

s 14.245 28.956

s* 389.408 Fisc

s* 319.207 Fisc

STAR S.A.’s m

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ng standards pr

Tel: +40-21-319 9476

Fax: +40-21-319 9477

Victory Business Center

Invingatorilor 24

Note: This is the English translation of the Romanian version of the auditor’s report. In case of

any discrepancies the Romanian version will prevail.

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of Aerostar S.A. Bacău

Headquarters: Bacău, 9 Condorilor Street, Bacău county,

Fiscal Registration: RO950531

Report on the Audit of the Financial Statements

Qualified Opinion

[1]We have audited the financial statements of Aerostar S.A. Bacău (the Company), which

comprise the statement of financial position as of December 31, 2021, and the statement of

income, the statement of other comprehensive income, the statement of changes in equity and

statement of cash flows for the year then ended, and notes to the financial statements,

including a summary of significant accounting policies.

[2]The financial statements as at and for the year ended December 31, 2021 are identified

Net assets/Total equity:

Net profit for the year:

421.388 thousand RON

59.940 thousand RON

[3]In our opinion, except of the possible effects of the matters as described in the

paragraphs [4] – [5] and except for the effects of the matter as described in the paragraph [6] of

Basis for Qualified Opinion section from our report, the accompanying financial statements give

a true and fair view of the financial position of the Company as at December 31, 2021, and of its

financial performance and its cash flows for the year then ended in accordance with the Order

of the Minister of Public Finance no. 2844/2016 for the approval of the accounting regulations

compliant with International Financial Reporting Standards.

Basis for Qualified Opinion

[4]The Company recognizes revenue from services related to civil and military aircraft

maintenance and repair projects upon completion of the provision of services and the transfer of

control of the goods to the beneficiary. Previously, the Company recognized these services as

income related to inventories of finished goods and services in progress at their cost of

production. Due to the nature of the services provided, they have no alternative use for the

Company due to contractual restrictions and practical limitations on the Company’s ability to

easily establish another use for those assets. Under these conditions, in accordance with the

provisions of IFRS 15 Revenue from Contracts with Customers, the beneficiary controls the asset as

it is created or improved, and the related revenue should be recognized over time as

maintenance and repair services are provided. We have not been able to obtain sufficient and

appropriate audit evidence to determine the impact of this departure from IFRS 15 on sales

revenue, income related to finished goods and work in progress, and implicitly on the net profit of

the current period, as well as the corresponding items in the statement of financial position.

Note: This is the English translation of the Romanian version of the auditor’s report. In case of

any discrepancies the Romanian version will prevail.

[5]According to the collective labor agreement, the Company provides employees with

retirement benefits. In accordance with IAS 19 Employee Benefits, such transactions meet the

criteria for recognizing an obligation. The Company did not hire specialists (actuaries) to

determine the amount of these obligations for retirement benefits and it did not include

estimates of these future payments as of December 31, 2021 and December 31, 2020.

Therefore, we were unable to determine those adjustments that may be required to the

accompanying financial statements to reflect the requirement of the reporting framework. Any

adjustments that may be required would affect the result for the current period, the retained

earnings, the employee benefit obligations and the net assets.

[6]As of December 31, 2021, current assets include the amount of 10,189 thousand RON

(December 31, 2020: 10,037 thousand RON), which represents the short-term portion of the

deferred tax receivables. In accordance with IAS 1 Presentation of Financial Statements, when an

entity presents current and non-current assets, as well as current and non-current liabilities as

separate classifications in its statement of financial position, it shall not classify deferred tax

assets (liabilities) as current assets (liabilities). Consequently, current assets are overstated by

10,189 thousand RON as of December 31, 2021, and 10,037 thousand RON as of December 31,

2020, respectively, and non-current assets are understated with the same amounts, without any

impact on the performance of these financial years.

[7]We conducted our audit in accordance with International Standards on Auditing (ISAs), UE

Regulation no. 537/2014 of the European Parliament and of the Council („The Regulation”) and

Law no. 162/2017 („The Law’’). Our responsibilities under those standards and regulations are

further described in the Auditor’s Responsibilities for the Audit of the Financial Statements

section of our report. We are independent of the Company in accordance with International

Ethics Standards Board of Accountants Code of Ethics for Professional Accountants (“IIESBA

Code”) together with the ethical requirements that are relevant to our audit of the financial

statements in Romania, including the Regulation and the Law, and we have fulfilled out other

ethical responsibilities in accordance with these requirements and the IESBA Code. We believe

that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

qualified opinion.

Note: This is the English translation of the Romanian version of the auditor’s report. In case of

any discrepancies the Romanian version will prevail.

Key audit matters

[8]Key audit matters are those matters that, in our professional judgment, were of

most significance in our audit of the financial statements of the current period. These

matters were addressed in the context of our audit of the financial statements as a

whole, and in forming our opinion thereon, and we do not provide a separate opinion on

See Note 13 Provisions

Provision Recognition Policy is set out in Note

3.2 “Applied Accounting Policies - Accounting

Policies for Provisions”.

As presented in Note 13 to the financial

statements, as of December 31, 2021, the

Company has total provisions amounting to

131,829 thousand RON, of which long-term

provisions amounting to 105,383 thousand

The estimation of a provision involves

significant professional judgement for the

Company’smanagementregardingthe

probable results of the relevant events and

the quantification of the probable related

Our audit procedures included, but are not

• We analyzed the current obligations of the

Company based on which the provisions were

• We analyzed the professional judgement

used by the Company’s Management in

determining the probable results of the

events and the quantification of the potential

• We obtained from the legal department of

theCompany,whereapplicable,the

assessment regarding the probability of

resolving the ongoing litigations as well as

what is the best estimate of the value

necessary for the settlement of the

obligations deriving from these litigations;

• We analyzed the maturity of the obligations

underlying the recognition of provisions and

theirclassification in the short and long term.

Key audit matter

Due to the importance of the amounts

reported in the Provisions item and the fact

that, by their nature, provisions imply a

significant degree of professional judgment,

we consider that these are a key matter for

the 2021 audit.

How our audit addressed the key audit

Note: This is the English translation of the Romanian version of the auditor’s report. In case of

any discrepancies the Romanian version will prevail.

Other information - Administrators’ Report

[9]Administrators are responsible for the preparation and presentation of Other

information. The Other information comprise the Administrator’s report, including the non-

financial representation, and the Remuneration Report, but does not include the financial

statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and, except to the

extent otherwise explicitly stated in our report, we do not express any form of assurance

conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the Other

information and, in doing so, consider whether the Other information is materially inconsistent

with the financial statements or our knowledge obtained in the audit, or otherwise appears to be

materially misstated.

With respect to the Administrator’s report, which includes the non-financial representation, we

read and report whether the Administrators’ report is prepared, in all material respects, in

accordance with the Order of Minister of Public Finance no 2844/2016, articles 15-19,

respectively 39-42 of the accounting regulations in accordance with International Financial

Reporting Standards.

Based solely on the work required to be undertaken in the course of the audit of the financial

statements, in our opinion:

[a] The information given in the Administrators’ for the financial year for which the

financial statements are prepared, is consistent, in all material respects, with the

financial statements;

[b] The administrators’ Report, including the non-financial representation has been

prepared, in all material respects, in accordance with OMFP no. 2844/2016, points

15-19, respectively 39-42, of the accounting regulations compliant with the

International of Financial Reporting Standards.

[c] The remuneration report has been prepared, in all material respects, in accordance

with the provisions of Law 24/2017, articles no. 106-107.

In addition, based on our knowledge and understanding of the entity and its environment

obtained in the course of the audit, we are required to report if we have identified material

misstatements in the Administrators’ report. We have nothing to report in this regard.

Note: This is the English translation of the Romanian version of the auditor’s report. In case of

any discrepancies the Romanian version will prevail.

Responsibilities of Management and Those Charged with Governance for the Financial

[10]Management is responsible for the preparation of the financial statements that give a

true and fair view in accordance with the Order of the Minister of Public Finance no. 2844/2016.

and for such internal control as management determines is necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

[11]In preparing the financial statements, management is responsible for assessing the

Company’s ability to continue as a going concern, disclosing, as applicable, matters related to

going concern and using the going concern basis of accounting unless management either

intends to liquidate the Company or to cease operations, or has no realistic alternative but to do

[12]Those charged with governance are responsible for overseeing the Company’s financial

reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

[13]Our objectives are to obtain reasonable assurance about whether the financial

statements as a whole are free from material misstatement, whether due to fraud or error, and to

issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of

assurance but is not a guarantee that an audit conducted in accordance with ISAs will always

detect a material misstatement when it exists. Misstatements can arise from fraud or error and

are considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.

[14]As part of an audit in accordance with ISAs, we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements,

whether due to fraud or error, design and perform audit procedures responsive to those

risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for

our opinion. The risk of not detecting a material misstatement resulting from fraud is

higher than for one resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

Note: This is the English translation of the Romanian version of the auditor’s report. In case of

any discrepancies the Romanian version will prevail.

Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty

exists related to events or conditions that may cast significant doubt on the Company’s

ability to continue as a going concern. If we conclude that a material uncertainty exists,

we are required to draw attention in our auditor’s report to the related disclosures in

the financial statements or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s

report. However, future events or conditions may cause the Company to cease to

continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements,

includingthedisclosures,and whetherthefinancialstatements representtheunderlying

transactions and events in a manner that achieves fair presentation.

[15]We communicate with those charged with governance regarding, among other matters,

the planned scope and timing of the audit and significant audit findings, including any

significant deficiencies in internal control that we identify during our audit.

[16]We also provide those charged with governance with a statement that we have complied

with relevant ethical requirements regarding independence, and to communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence,

and where applicable, related safeguards.

[17]From the matters communicated with those charged with governance, we determine

those matters that were of most significance in the audit of the financial statements of the

current period and are therefore the key audit matters. We describe these matters in our

auditor’s report unless law or regulation precludes public disclosure about the matter or when, in

extremely rare circumstances, we determine that a matter should not be communicated in our

report because the adverse consequences of doing so would reasonably be expected to

outweigh the public interest benefits of such communication.

[18]The financial statements for the financial year ended December 31, 2020 were audited by

another auditor who expressed an unqualified opinion on March 16, 2021 on these financial

[19]This report of the Independent Auditor is addressed exclusively to the Company’s

shareholders, as a body. Our audit was undertaken in order to report to the Company’s

shareholders all those aspects that we are required to state to them in a financial audit report

and for no other purposes whatsoever. To the extent permitted by law, we do not accept or

take responsibility to anyone other than the Company and its shareholders, as a body, for our

audit work, for the report on the financial statements and the report on the Administrators’

Report, or for the opinion we have formed.

Note: This is the English translation of the Romanian version of the auditor’s report. In case of

any discrepancies the Romanian version will prevail.

Report on other legal and regulatory requirements

[20]We were appointed by the General Shareholders’ Meeting on April 21, 2021 to audit the

financial statements of the Company for the year ended December 31, 2021, December 31,

2022 and December 31, 2023. Our total uninterrupted period of engagement is 1 year, covering

period ending December 31, 2021.

We confirm that:

-Our audit opinion is consistent with the additional report presented to the Audit

Committee of the Company, which is issued with the same date as the current report. We

also remain independent of the audited entity in conducting the audit.

-We have not provided to the Company the prohibited non-audit services referred to in

article 5 (1) of EU Regulation no 537/2014.

Report on compliance with Commission Delegated Regulation (EU) 2018/815 (European

Single Electronic Format Regulatory Technical Standard or ESEF)

[21]We have undertaken a reasonable assurance engagement on the compliance with

Commission Delegated Regulation (EU) 2018/815 applicable to the financial statements

included in the annual financial report of Aerostar S.A. Bacău (the Company) as shown in the

digital files containing the unique code LEI 315700G9KRN3B7XDBB73 (Digital Files).

Responsibility of management and those charged with governance for Digital Files prepared

in accordance with ESEF

[22]Management is responsible for preparing the Digital Files in accordance with ESEF. This

responsibility includes:

• the design, implementation and maintenance of the internal control relevant to the

application of ESEF;

• ensuring consistency between the Digital Files and the financial statements that will be

published in accordance with Order no. 2844/2016 with subsequent amendments.

Those in charge of governance are responsible for overseeing the preparation of Digital Files in

accordance with ESEF.

Note: This is the English translation of the Romanian version of the auditor’s report. In case of

any discrepancies the Romanian version will prevail.

Auditor’s Responsibilities for Audit the Digital Files

[23]Our responsibility is to express a conclusion on whether the financial statements

included in the annual financial report complies in all material respects with the requirements of

the ESEF, based on the evidence we have obtained. We conducted our reasonable assurance

assignment in accordance with International Standard on Assurance Assignments 3000 (revised),

Assurance Assignments other than audits or reviews of historical financial information (ISAE

3000) issued by the International Auditing and Assurance Standards Board.

A reasonable assurance engagement in accordance with ISAE 3000 involves performing

procedures to obtain evidence about compliance with ESEF. The nature, timing, and extent of

the procedures selected depend on the auditor’s judgement, including the assessment of the

risk of material departures from the requirements set out in ESEF, whether due to fraud or

error. A reasonable assurance engagement includes:

• obtaining an understanding of the Company’s process for preparation of the Digital Files in

accordance with the ESEF, including the relevant internal controls.

• reconciling the Digital Files with the audited financial statements of the Company that will

be published in accordance with Order no. 2844/2016 with subsequent amendments.

• evaluating if all financial statements that are included in the annual financial report have

been prepared in a valid XHTML format.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for

our conclusion. In our opinion, the financial statements for the financial year ended

December 31, 2021 included in the annual financial report and presented in the Digital Files

comply, in all material respects, with the requirements of ESEF.

In this section we do not express an audit opinion, a review conclusion or any other assurance

conclusion on financial statements. Our audit opinion on the Company’s financial statements for

the financial year ended December 31, 2021 is included in the " Report on the Audit of the

Financial Statements" section above.

For and on behalf of BDO Audit SRL

Registered in the Public Electronic Report of financial auditors and

audit firms with no. FA18

Partner’s name: Cristian Iriciuc

Registered in the Public Electronic Report of financial auditors and

audit firms with no. AF4090

Bucharest, RomaniaMarch 25, 2022

For stamp and signature

please refer to the original

Romanian version